that's it for us. erin burnett "outfront" starts now. > "outfront" next. cease-fire in the middle east. after seven days of deadly attacks between israel and gaza, and, yet, more rocket fire tonight. hillary clinton calls it a critical moment for the region. everyone wants to know the same thing. will it last? we have top officials from both sides "outfront" tonight. and speaker of the house john boehner put obama care on the table. he says if we're serious about getting our financial house in order, obama care has to go. is he crazy? or crazy like a fox? let's go "outfront." good evening, everyone. i'm erin burnett. and "outfront" tonight, cease-fire.

142 people were killed in gaz why and five in israel, egypt helped negotiate a temporary truce which took effect at 9:00 at night in tel aviv. it was met with gunfire in the streets of gaza city. it is fragile. israeli defense forces say there are five rockets launched from gaza since the cease-fire went into effect. and prime minister benjamin netanyahu's statement was cautious. he said he was willing to give the egyptian cease-fire a chance before there is a need to use greater force. not exactly a ringing endorsement. here's the key thing, while the united states got involved with a visit from hillary clinton this deal was not brokered by the usa. >> this is a critical moment for the region. egypt's new government is assuming the responsibility and leadership that has long made this country a corner stone of regional stability and peace. >> seemingly unexpected leader

was egypt's mohamed morsi, a man we've seen at rallies where egyptians chanted we are hamas. it's an impressive feat and the first time that israel has ever negotiated with an islamist government. but there are some shady things about the deal. according to an israeli newspaper, neither side officially signed penned to paper on the cease-fire agreement which raise sometimes questions about it. and here's what we know is in the verbal deal. israel has agreed to hold its fire and end attacks against top militants and this is important, promise to look at ways to ease its blockade of the gaza border. hamas agreed not to strike any israeli targets and agreed there is no passage of weapons into gaza and to insure other palestinian groups in the gaza strip stop their attacks. if you're shaking your head that some of these things are very tall order, well, you're right. later "outfront" we have the key players, israel's foreign deputy minister and leerd of the plo to the united states. they will be our guests and

answer those questions. but cnn's ben wedeman is in gaza city tonight with the latest from there. describe the situation. it was amazing to watch it today leading up to the cease-fire. it's not like it went off quietly in the night, was it? >> reporter: no, in the hour and a half between the time the announcement was made in cairo and the cease-fire went into effect, we saw increasing numbers of israeli air strikes, artillery barrages into gaza city itself. some of them quite close to where i'm standing. and we saw three separate volley of rockets fired from gaza city toward israel. it did seem as if they were working against the clock to get just a few last whips in or hits in to the other side before the cease-fire went into effect. when it did go into effect, it became very calm, very quiet.

then we started to hear celebratory gunfire coming from a bit of the distance from here. but it came closer and closer and we saw more and more cars out on the street. more than we've seen now for the last eight days for quite some time. there were very few cars out. definitely after dark, hardly any. but it went very quickly from pretty quiet to very noisy here in gaza city. >> can you talk about celebratory, some people celebrating that it's over and they could live their lives and they weren't afraid. others possibly celebrating they thought they scored some sort of a victory. what was the celebration more about? >> well, it was partly victory. i was here at the end of operation cast led in 2008-2009. and when finally the guns stopped firing and the air strikes came to an end, people came out and they were shell shocked.

they literally were shell shocked. more than 1,400 people were killed in gaza. and people were just walking around looking in utter amazement and shock at the amount of destruction that happened. this time around, gaza was spared an israeli ground incursion. the death toll was only about a tenth of what it was during the last operation four years ago. the feeling is they survived. they got some concessions out of israel. and now they can get on with their lives and tonight probably gets some sleep. erin? >> all right, ben, thank you very much. ben is talking about the reaction in gaza. the entire cease-fire was in jeopardy earlier today. during the final negotiations a bomb exploded on a bus in the heart of tel aviv. 24 people were injured. that is where sarah sidener is tonight. what is the reaction from the israeli people? ben talking about what is happening in gaza. but what about in israel? >> reporter: there was a lot of concern and frustration and worry and real fear off that bus

exploded around noon. it happened very close to the military headquarters as well. we're talking about injuring nearly two dozen people, five of whom are in the hospital. police very close to making arrests on that. but the reaction after that in that same area as you might imagine, you have two different reactions, one, some people are saying, look, we think that prime minister of israel should finish off the job. that they should go in and take care of this so that this doesn't ever have to happen again where they're seeing rockets come over or bomb blasts in a city like tel aviv or any city in israel. but then you had other people who are very concerned about the ground war. did not want to see a ground war happen. didn't think there should be some sort of permanent solution by any means necessary. but ultimately every single person that we had a chat with and who came up to us and wanted to talk about it wanted a

permanent solution to this problem, to this crisis, to this fight, if you will. between gaza and israel. and including all of the militant groups inside of gaza not just hamas itself. it will take all of them to stop the rocket fire from coming over and the subsequent air strikes that israel does after it is hit. >> all right, sarah, thank you very much. a permanent solution so hard to envision how that could happen. tens of thousands of israelis were called for duty for that possible ground war. fred planken has been with the israeli forces. are they moving back from the border? >> reporter: erin, the troops are still at the border. we're not seeing the troops move away just yet. certainly we believe they're going to stay there for at least another four or five days because, of course, one of the things that the israelis are doing, especially in the next couple of hours, is they're going to be monitoring whether or not the cease-fire is actually being kept by hamas as well. what we've seen so far is there is smaller violations.

one or two rockets have been fired out of gaza. the israelis say by and large the cease-fire is still holding. if you talk to people here, a lot of them are skeptical whether or not the cease-fire will hold. a lot of them say they heard talks like this before. they think that hamas is actually still in place and, therefore, they fear that a couple months down the line or a couple of years down the line they might have rockets raining down on their heads as they have had the past couple of days. by and large, however, folks that we're talking to here on the streets say that at least for now they're quite happy that the violence has ended or seems to have ended and they hope that it might last for longer than the past couple of times which brought us, of course, to the situation before the on going military operation that was going on here when we saw the violence. they hope this time it will last. however, most of them are skeptical. erin? >> israel and gaza both claim the cease-fire as a victory. but there was a clear winner.

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our second story "out front," boehner put obama care on the table. he is arguing that if the united states is serious about getting our fiscal house in order, the president's health care law has got to go. he wrote, "we can't afford it and we can't afford to leave it intact. that's why i've been clear that the law has to stay on the table." obviously referring to the negotiating table. yes, even though the president won re-election over contender who said he would repeal obama care on day one, baner is boehner is like a dog with this bone. out front tonight, writer for the national review, political analyst role land martin and david frum, former adviser to george w. bush. you think the election is over. there are a lot of things can

you argue about. a lot of victories can you score. but getting rid of obama care is something that was tabled in the election. >> i think that's fair. there are two pieces to this debate. one thing that is a huge contradiction and problem for republicans is this. the thing that they campaigned on, getting rid of the medicare savings in the obama care law, that's something that would actually make the deficit picture look a lot worse over the next ten years. that's obviously, you know, that cuts against this narrative. on the other hand, there are a lot of things about the obama care law that are going to be fiscal problems. for example, the law treats people who are on the exchanges really differently from it treats people who get insurance through the employers. so there are a lot of those things that probably should be fixed but aren't going to yield big savings in the short term. as a matter of deficit negotiations, i think boehner is not on strong footing. >> interesting. there are a lot of problems with obama care. i think obama would be the first person to acknowledge that. he didn't get a lot of things he wanted in there.

but david frum, what is john boehner doing? what is he possibly trying to gain from this? >> okay, i'm going with your crazy luke a fox option. >> good. >> john baner is about to have to bring the more conservative part of his caucus, some very bad news. republicans don't have a wlost leverage. tax cuts expire whether without anybody doing anything. and republicans are going to end up yielding a lot more than they give -- than they get in the negotiations. and john boehner, as the chief negotiator is the man identified with that surrender. so he needs to put down a marker now that says to the right wheel of the caucus, hey, i'm with you. if it were up to me, 100%. i'm with you. and i am going to put it in writing. i'm completely in favor of doing all the things that would have happened if we won the election. however, we didn't win the election. and we have facing this fiscal cliff and it's scary. so i'm about to have to do things you don't like.

but be assured that my heart is in the right place. >> rolan what about this? they voted for obama. but when you look at how many people cnn poll last week, 51% of this country oppose the health care bill. 42% favor it. maybe boehner is on to something. >> no, he's not. because frankly we got to go look at those numbers. remember, there are significant number of people in this country who felt that the bill should have gone further. there are people -- again, simply not oppose and favor. you look at the number of the polls done, a lot of people said they want a single pair option. yeah, i don't favor this one. >> i want canada. >> i favor universal health care. let me be clear. let me channel the obama administration for a second. this is how they're responding to the proposal. next! it ain't going to happen. he can sit here and sing all day

saying put it on the table. trust me, it's not going to be on the table. so it's cute. it's an op-ed, it's great. but trust me, even he knows, the president is not going to put the affordable care act on the table and so it's not crazy like a fox. it's simply crazy. >> okay. >> what about the possibility though, i think this is a reality. to get a grand bargain that works, and i'm not a crazy person. i don't think we're getting one. >> so you claim. >> so i claim. my own self evaluation. but in order to actually get that done, we do have to make changes to health care. and i believe the president agrees with that. but we do. >> yeah. i think that's absolutely right. actually one of the tricky questions is going to be how the president is going to introduce some of these ideas about cost control that weren't part of that original debate. there is a lot of talk about administrative price controls, all pay rent setting, terms we haven't heard bandied about that will be talked about in the years to come.

there is another big thing, setting up the exchanges is really tough complicated stuff that's got to take a lot longer than people think. so this is going to be -- there's going to be a lot of issues that republicans are going to be able to pick and poke at and democrats have to think hard about. >> david frum, can john boehner get the guys and gals to come along? >> sure. in fact, i think something's going to happen. it's not a grand bargain. the whole fiscal cliff problem is completely artificial. is it utterly unnecessary self-inflicted trap that was in response to a dilemma the republicans kreecreated for themselves in the summer of 2011. i think what we'll end up having to do is just get rid of the sequester. there's to reason for that. it's gone. good-bye. and the second thing that we then do is have a -- we extend the present tax rates for another six months. and then argue taxing and spedding without an artificial gun to our head.

there are enough scary things out there in the world that the united states congress does not need to invent some additional ones totally unnecessarily. >> all right. thanks to all three of you. >> quick final word, yeah? >> real simple. both sides are going to have some significant pain in this. you have to deal with the defense. you have to deal with medicare. you have to deal with entitlements. nobody's going to get off easy. but if republicans think can you balance it on the backs of the elderly and poor, trust me, that's where the fight is going to be. share the pain if you want to have the gain of being able to deal with the deficit. >> thanks to all three of you. appreciate it. our third story "outfront." tax the rich? no, tax the wealthy. wealth is something you build over time. shows itself in the forms of superexpensive assets. mansions, boats, expensive wine. 41 days from the fiscal cliff and bitter partisan deadlock, we

want to test drive another idea, where the wealthy would pay more, but tax rates on people who work might not go up. is this the buff rhett rule really should have been? we have david altman, and daniel, great to see you. what is amazing to me, reading your proposal here, that would tax the wealthy as opposed to the rich, it's against the constitution right now to tax wealth in this country. >> that's right. can't have a direct tax like that. we needed a constitutional amendment to get the income tax back, so we need another amendment. it's 100 years later, let's update for the 21st century. >> i want to change the voting day. i'm all for it. let's break down your math. if we taxed wealth, where people accumulate over time. 2010, 58 trillion dollars. if you put 1.5% tax, 8$870

billion. that's a lot of money. more than we got on income tax this year. and it will disproportionately affect the wealthy. it seems close to a silver bullet. >> you can increase the estate and gift tax with a wealth tax of 1.5%. it should be graduated and progressive. the most important issue is to deal with wealth inequality. which is much more severe. getting worse, getting worse for the last 20 years, and the only countries in the world that have more than 10 million people, close to how bad it is, in this country are all in africa and latin america. >> we're not necessarily talking about someone who works really hard, an entrepreneur that works hard, you are talking about the people initially -- teresa heinz kerry, warren buffett, that's who will be hit the hardest? >> absolutely. the proposal had an exemption of

proposals with up to $500,000 in wealth. that exempts most households right there. >> how did you draw that line? even on the bentley, people will say it has dents and it's not worst much. how do you have that? >> we have a lot of cheating with income tax and with a wealth tax, i'm sure people would try to cheat on that as well. we might have to have high slightly higher rates. but fighting wealth in equality is so important, bought that's what affect your opportunity and our wealth inequality is hurting were living standard in the long run. >> 500,000, why did you pick that? anything under that, you won't get taxed, above it, you are. >> it already exempts about 80% american households. if you want to make a debt in inequality, you have to have a progressive tax system, and this is a way to do it. >> let us know what you think. trying to be proactive here and

help solve the problem. help those guys in washington now. israel why and gaza are claiming the cease-fire as a victory. the senior guys are "outfront" next. and host he is gets an answer. the saying easy as pie? i get it now. just unroll it, fill, top, bake, and present. that must have taken you forever! it was really tough. [ female announcer ] pillsbury pie crust. let the making begin anyone have occasional constipation, diarrhea, gas, bloating? yeah.

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we start the second half of our show with stories we care about where we focus on our reporting from the front lines. tonight at the united nations, ambassador susan rice addressed the controversy surrounding her response to the september 11th attack on the american consulate in benghazi, libya. this is the first time she's addressed it. here she is. >> i relied solely and squarely on the information provided to me by the intelligence community. i made clear that the information was preliminary. and that our investigations would give us the definitive answers. everyone, particularly the intelligence community, has worked in good faith to provide the best assessment based on the information available. i have great respect for senator mccain and his service to our country. i always have. and i always will. i do think that some of the statements he made about me have been unfounded.

but i look forward to having the opportunity at the appropriate time to discuss all of this with him. >> senator mccain, of course, has said that susan rice is not qualified to replace hillary clinton as secretary of state. and he said he would block her nomination. representative jesse jackson jr. resigned from congress saying he needs to spend more time on his health. he's been battling bipolar disorder and other things. in a letter to john boehner, jackson said his constituents deserve a full time legislator in washington, something i can not be for the foreseeable future. my health issues and treatment regimen is incompatible with service in the house of representatives. jackson is the subject of investigations by the fbi aej house ethics committee. a group of world powers say they want to resume negotiations with iran over the nuclear program as soon as possible. the last time what is called the p-5 plus one held talks with iran was in june. and this came after a report from the international atomic energy agency which just said iran is not cooperating with nuclear inspectors. they also said iran has

completed the installations of centrifuge tez fuel enrichment plant, a plant that can enrichure and yum to 20% which is crucial. it's at that level that it becomes easier to convert it to a weapon. a judge has given a preliminary approval for hostess brands, the maker of twinkies to liquidate. hostess can now start the process of selling the bakeries, brands, and recipes. it will be the most valuable thing it has, everybody. the ceo told reporters after the hearing that they will move as quickly as possible to sole sell those brands. the sad part of 15,000 of the company's 18,500 employees will likely lose their jobs in the next few days. >> it has been 475 days since the united states lost its top credit rating. what are we doing to get it back? seems like we say it every week. mortgage rates another low. the average rate on a 30-year fixed 3.31%. as we said now for well over a year, interest rates are not the problem. and now our fourth story "out front." what's at stake for israel and hamas tonight as they move

forward under a cease-fire? both sides say that they've come out on top. duri temporary period of calm, netanyahu is warning everyone. >> we need to exhaust this opportunity to obtain a long-term cease-fire. >> long term cease-fire. so what really happened today? is the cease-fire for real? and who does it benefit the most? we have the ambassador from the plo to the united states in just a moment with the palestinian viewpoint. first, israel's deputy foreign minister daniel ilan. thank you very much for taking the time. we really appreciate it. let me ask you the basic question. is this cease-fire for real? >> thank you, erin. good to be here with you. we hope so.

since we have held fire, we received 12 rockets coming from gaza. we have restrained ourselves. and we hope that this is just a residual kind of shooting. durable, quiet is important as a first stage. secondly, we would very much like to see that there will be a regime of inspection installed so hamas will not be able to rearm itself. and for the long run, hamas can become a legitimate interarbitor only if it receives the expectations indeed the conditions of the international community as it was reflected by the quartet. that is they have to stop altogether terrorism. they have to recognize israel's right to exist and abide by former agreements. if this is the case, then we are on a very auspicious roll.

>> it's a tall order. the prime minister's statement, we just heard him speak there, but his statement itself was not a ringing endorsement. it was open ended. it said he would gift egyptian cease-fire proposal "a chance" and then continue to say, i'll quote him, "before there is a need to use greater force." i mean it's purposeful that israel wants to feel the threat there? our reporters are saying obviously that there has been no withdrawal of idf forces from the border either. >> right. you know, we have to be very careful. it is not secret that we are preparing and we're still prepared for a land operation ground troops to really approve all of the terrorists. and we hope we'll not need to use them. but the next few hours will tell a lot. if we see that hamas indeed abides by the cease-fire, there is no reason to go in. >> let me ask you the terms of the cease-fire. something i read in a newspaper today. the deal was not physically

signed. there was no pen to paper. there was no physical deal. why not? >> well, first of all, you know, we do not talk to hamas. hamas is avowed on the destruction of the state of israel, indeed the entire jewish people don't take it from me. just read their chargers and all their inputs in their web sites. they are considered as a terror organization. >> but egypt brokered it, right? they could have both sides sign through egypt, right? >> you see, the u.s. europeans, question not deal with hamas because by law they are a terrorist organization. like you wouldn't deal with al qaeda. the egyptians, yes, they have special relations with them. i think the egyptian involvement was very valuable. i think the leadership that was exercised by president obama and hillary clinton was tremendous.

and the formalities are of less consequences than the intentions and indeed the dealing on the ground. >> i understand that. but it also seems that formalities, especially on this issue that is so intractable, they -- they're more than formalities. that is a sign of something so much deeper. which brings me to egypt. you negotiated now using egypt as an interimmediate airy. they're an islamist government. their president appeared at rallies where they talk about jerusalem as the capital of the arabs, there are chants we are all hamas. as you said, he stepped up and played a pro active role here. are you setting a precedent where you're going to have to talk to hamas? >> well, again, we will be very happy to talk to hamas. we have been ready to talk to hamas since they took over gaza, actually in a coup against the plo.

but first, they will have to recognize our right to exist. secondly, they have to renounce terrorism. if this is the case, then they are legitimate -- as the plo was before they refused to recognize israel. it was recognized as a terror organization. they changed. maybe we have a precedent here that hamas can change as well. it's certainly within the interest of hamas and people of gaz why and the palestinian people in the region that they will change their ways. >> right. the turkish foreign minister visited gaza yesterday. i'm sure you're aware of. this the video went viral. he broke down after meeting a palestinian father who's son was killed in an air strike by israel. he condemned the attack. demanded israel stop immediately.

jordan, another country that recognizes you condemned at tack saying they were in violation of international and humanitarian law and a stark violation of the freedom of worship. i'm quoting them. when you see that from the two of the three countries that recognize you, it seems fair to ask whether you think hamas actually gained ground in the region in this conflict. >> well, erin, it's -- i would say that for us and i think for any democratically elected government, the priority is first of all keep your people safe. you know, we've had four million israelis under fire, especially one million over southern -- the southern part of israel where children could not really sleep at night. could not go to school safely. we've had also our casualties, six israelis killed. many, many injured and, of course, all the psychological damage, all this traumatic experience for many. so i think that it will be useful for leaders in the region to look at both sides and also to see who starts the whole war here. who is the interest to do it?

and we have to remember, hamas is still very much is being backed by iran, by hezbollah, by assad of syria, all the murderers and very evil forces in the region that support hamas. it's not their interest of the countries in the region to support hamas. terrorism can spill over. we saw it in egypt. how 16 egyptian soldiers were murdered because of the spillover of terrorism from gaza, ham as. >> all right. thank you very much for coming on and talking about the israeli side of this. we appreciate your time. i want now to get to the other side of the conflict and bring in the chief representative of the general delegation of the palestine liberation organization to the united states. good to talk to you, ambassador and to talk to you again. >> thank you. >> the other day when you were on this program before the cease-fire and i asked you whether you supported hamas, you said when it comes to our differences with hamas we have differences practically. this is normal. but what is happening in the gaza strip, a direct attack on innocent civilians, we're witnessing a deliberate escalation on the part of the israelis to cause as much possible civilian deaths." given that, do you think the cease-fire will last? >> well, we hope that it will last. but it was interesting listening

to the deputy foreign minister who today stirred controversy by making a statement with a raid yes station in new york, wnyc in which he said that all the civilians who were killed in the gaza strip deserved it. he said that in a show called "the take away." you listen to them about the psychological impact of the children in southern israel who could not sleep or go to school while forgetting at the same time that one-third of the civilian casualties in the gaza strip were children. so, of course we are pleased that egypt and other countries managed to reach this cease-fire. but this not the solution to the problem, erin. >> people in gaza were celebrating in the streets after the cease-fire. our reporter was describing that just a few moments ago. why do they think this is a win? just on a purely practical level, people died. children died. and the only thing you can really see has changed here is they have fewer rockets than they did eight days ago. >> well, i think many people are happy that it is over. i am not sure they were in the streets to celebrate the "win or victory." they consider what happened last week and the way that people of gaza sustained, endured this brutal military campaign by the largest military in the middle

east. so a lot of them are celebrating the fact that the war was over. >> but what happens from here? i mean that's -- i don't really understand. you say -- it doesn't really seem anybody won. nothing has changed. hamas still says israel doesn't have a right to exist. israel still says -- i mean nothing's changed. >> you know, israel has always used the excuse other factions or palestinian organizations not recognizing them. and the plo did recognize israel in 1993. and we even deleted clauses in our chart that called for the destruction of is niz 1996 and 1998. 20 years after we signed peace treaty with israel, recognized israel as a right to exist, israel still occupied palestinian lands, occupied the palestinian people and still determined not to allow the people to decide their own

future. so we are getting confused here. israel is attacking those who are allegedly attacking them with rockets and missiles and attacking the other camp who want to make peace with them and want to sit down to resolve the conflict. i don't think israel is serious about making peace with the palestinians. they want to preserve the status quo and keep their occupation of the palestinians forever. >> let's talk about that bombing then in tel aviv today. you know, when the leader of hamas was asked about it, not only did he not talk about whether hamas was responsible, he actually praised the bombing. >> well, i can not speak on behalf of hamas. i didn't hear that particular leader. but our position on violence and counter violence is clear. the plo does not condone the killing of civilians, be it israelis or palestinians. if you look at the last week of this confrontation, you know very well that 140 palestinians have been killed. 1,000 were wounded. it's very clear who paid the heavier price in this confrontation. >> all right.

so let's talk about the conditions of the cease-fire. one of them in terms of the weapons. one of the terms was there is no passage of weapons into gaza. this is obviously significant. one bus alone last year 50 tons of weapons were found being smuggled into the gaza strip. there were mortar shells, anti-missiles, ammunition, assault rifles. is there any way hamas is going to stop smuggling weapons? that one seems to hard to believe. >> the only way to do that is to, one, end the blockade against the gaza strip confining 1.7 million people under a total israeli siege. you keep hearing officers say we pulled out our troops. we pulled out our settlers in 2005. technically, the ga yaz strip is still under israeli military operation. two, israel needs to deal with the issue politically. as long as there is an israeli military occupation of palestine and the palestinian people, there will be no peace and security for anybody in the

region. so the best way to prevent tension, to prevent hostilities is by ending this conflict once and forral, allowing the palestinians to establish their independence, live side by side with all their neighbors. >> all right. thank you very much ambassador arikot. thank you for your time again. despite the cease-fire, israeli drones are crisscrossing the skies over gaza. we're going to take you on a behind-the-scenes look that the company that built these. in congo, military plans to liberate the country. that could be bad for freedom. ♪ announcing the all-new 2013 malibu from chevrolet. ♪ with a remarkable new interior featuring the available chevrolet mylink infotainment system. this is where sophisticated styling begins. and where it ends? that's up to you. it's here -- the greatest malibu ever. ♪

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thanksgiving weekend, at sleep train. ♪ sleep train ♪ your ticket to a better night's sleep ♪ tonight we go to the congo where a rebel group now says it plan to liberate the entire country. they say they want to push onto the capital of the drc. earlier i asked david mckenzie who are the rebels and what do they want. >> reporter: they split from the army earlier this year. since then they have been pushing onto a key area along

the border of rwanda. they have been recruiting children, sometimes forcibly, to their cause. it's an accusation rwanda strongly denies, but the u.n. said they pushed into the city using sophisticated equipment. the worry is that this war will pull in regional powers. erin? >> thank you very much. along with warplanes and rockets, drones have been chris cossing the skies over gaza for days. we got a tour behind those drones. >> reporter: before the booms and the blasts, a hum. droning were in the air space over gaza and even after the cease fire, they will rerain.

>> they are ubiquitous. hundreds of them flying around. >> reporter: days before the conflict broke out, cnn was on the grown in tell aviv to get an inside look of the manufacturing of the drones. we visited the biggest manufacturer. is rule aerospace industries. the company does $3.5 billion annual sales. a quarter of that go to the ministry of defense. they make one of israel's most valuable tools. >> we can see the uav position. >> uavs are planes without pilots and operated with the click of a mouse. >> sometimes you need to get footage. this is something better to be done by an unmanned capability. >> the flying is with a trackball, and i'm actually just commanding the direction and the speed and altitude. and then the uav will follow my command. when i want to land or take off, i just need to click a button.

short drive away, the parts of the drone are crafted. >> it is a high-tech nolg. the stabilization and a lot of soft fair. >> that allows the drones to see far away and function as a surveillance tool. >> the main requirement is to see if you see a person a few kilometers away and he's holding something, do you want to know if it's a gun or a stick? >> in the future, the drones could get smarter and smallen. cnn money got a look at the latest yet to hit the market. a surveillance drone the size of a butterfly aimed to alert soldiers of danger ahead on ground. >> lara joins me now. the missiles have stopped, but drones are continuing, and they can hear them. what are they doing? >> they are still there. they were there before and they will be there after.

they have cameras and they said we can see your shoes from miles and miles away. a license plate. and what they are doing now they are going to continue with the surveillance. that being said, this high-tech stuff is changing quickly. they can carry out targeted attacks. we are going to see this more and more >> what about in terms of the money here. the united states is a huge supporters of israel's defense. the u.s. gives $3.1 billion in military aid annually. so israel can spend 25% of that to build up their own defense systems. america is really supporting israel build the technologies. if you look at they were building the drones, and they were responsible for building the iron drones. you heard obama say today, that he is going to support this more and more.

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the internet has been buzzing about paris hilton. people were incensed that she would be opening a store there. she is opening the store 20 minutes from the mecca mall.

one of three major shopping centers. people do some serious shopping there. critics don't have a problem with the store, they have a problem with paris. she has taken her share of deserved derision. she is a savvy business woman. in saudi the women have to wear black. you cannot go in public without one. so handbags are a vital pun sign of style and status. that's how you show your sexy. i remember when we put our stuff down to walk and talk in front of the camera. i want to hold my handbag in the shot, that's my style. get this, she has five other stores in saudi and four in the mid east. you know what, we don't like her social life but tonight we celebrate her professional accomplishment.

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